The Devil's Chessboard: Allen Dulles and the Rise of America's Secret Government

by David Talbot

The Bay of Pigs came after a long string of Dulles victories. Given free rein by President Eisenhower to police the world against any insurgent threat to U.S. dominion, Dulles’s CIA overthrew nationalist governments in Africa, Latin America, and the Middle East, and even targeted troublesome leaders in allied European countries. Dulles called himself “the secretary of state for unfriendly countries”—which had an ominous ring when one took note of what happened to unfriendly countries in the American Century.

Kennedy had also signaled an eagerness to dramatically change America’s hostile relationship to the developing world, expressing a sympathy for the national liberation movements in Algeria, the Congo, Vietnam, and elsewhere that he saw as historically inevitable.

In the view of the Dulles brothers, democracy was an enterprise that had to be carefully managed by the right men, not simply left to elected officials as a public trust.

The Dulles brothers were not intimidated by mere presidents. When President Franklin Roosevelt pushed through New Deal legislation to restrain the rampant greed and speculation that had brought the country to economic ruin, John Foster Dulles simply gathered his corporate clients in his Wall Street law office and urged them to defy the president. “Do not comply,” he told them. “Resist the law with all your might, and soon everything will be all right.”

when Allen Dulles served as the United States’ top spy in continental Europe during World War II, he blatantly ignored Roosevelt’s policy of unconditional surrender and pursued his own strategy of secret negotiations with Nazi leaders.

After the war, Dulles helped a number of notorious war criminals escape via the “Nazi ratlines” that ran from Germany, down through Italy, to sanctuary in Latin America, the Middle East, and even the United States.

Dulles undermined or betrayed every president he served in high office.

Dulles’s forced retirement did not last long after Kennedy jettisoned him from the CIA in November 1961. Instead of easing into his twilight years, Dulles continued to operate as if he were still America’s intelligence chief, targeting the president who had ended his illustrious career. The underground struggle between these two icons of power is nothing less than the story of the battle for American democracy.

Among the CIA men coming in and out of Q Street were several who later came under investigation by the House Select Committee on Assassinations and other probes for their possible connection to the president’s murder. And on the weekend of the assassination, Dulles hunkered down for unexplained reasons at a secret CIA facility in northern Virginia known as “the Farm,” despite the fact that he had been removed from the agency two years earlier. Such was the odd swirl of activity around the “retired” Dulles.

Dulles was so actively involved in the official investigation of Kennedy’s murder that one observer remarked it should have been called the Dulles Commission. He worked carefully behind the scenes with his former CIA colleagues to steer the inquiry away from the agency itself and toward “lone gunman” Lee Harvey Oswald.

Over half a century later, many questions about JFK’s violent end remain “unspeakable,” in the words of Kennedy biographer James W. Douglass—at least in the carefully controlled arena of media discourse. It is even more unthinkable in these circles to explore the suspicion that Allen Dulles himself—a towering pillar of the U.S. establishment—might have played a role in the epic crime against U.S. democracy that took place in Dallas. But this is just one of many taboo and top secret areas of Dulles’s life explored in this book.

Is there a taboo? CIA killed Kennedy is entry level conspiracy theory and was floated in the 60s

Many of the practices that still provoke bouts of American soul-searching originated during Dulles’s formative rule at the CIA. Mind control experimentation, torture, political assassination, extraordinary rendition, massive surveillance of U.S. citizens and foreign allies—these were all widely used tools of the Dulles reign.

There is an implacable brutality to power that is familiar throughout the world and throughout history. And no matter where power rules, there is the same determination by those in high places to keep their activities hidden.

“Life sweeps you along—you see people floating by. Everyone is so busy and in the moment. It’s only later that you realize what happened and how alarming it all was. You read books and you finally try to put it all together, and you don’t know what to believe.

Dulles not only enjoyed a professional and social familiarity with many members of the Third Reich’s elite that predated the war; he shared many of these men’s postwar goals. While serving in his Swiss outpost, Dulles might have been encircled by Nazi forces, but he was also surrounded by old friends.

Swiss bankers promised the Allies that they would block Germany’s stolen assets, but all the while they reaped huge profits from their behind-the-scenes deals with the Nazi Reichsbank.

Sullivan and Cromwell, the Dulles brothers’ Wall Street law firm, was at the center of an intricate international network of banks, investment firms, and industrial conglomerates that rebuilt Germany after World War I. Foster, the law firm’s top executive, grew skilled at structuring the complex merry-go-round of transactions that funneled massive U.S. investments into German industrial giants like the IG Farben chemical conglomerate and Krupp Steel. The profits generated by these investments then flowed to France and Britain in the form of war reparations, and then back to the United States to pay off war loans.

By siccing men like William O. Douglas on men like John Foster Dulles, President Roosevelt drove the plutocracy mad. J. P. Morgan Jr. was so incensed by the “class traitor” FDR that his servants had to cut out the president’s picture from the Wall Street titan’s morning newspaper for fear that it would spike his blood pressure.

presidency. In 1934, a group of Wall Street plotters—financed by wealthy Roosevelt enemies (and Dulles clients) like the Du Ponts—tried to recruit Marine war hero General Smedley Butler to lead an armed march on Washington. In 1940, newspaperman and socialite Cornelius Vanderbilt Jr.—one of FDR’s few friends in the New York club set—tipped off Eleanor Roosevelt to another anti-Roosevelt plot he had heard being hatched in his Fifth Avenue circles, involving tycoons as well as army officers.

business plot

“The White House wanted Dulles in clear contact with his Nazi clients so they could be easily identified.”

the Bank for International Settlements. BIS had been created by the world’s leading central banks to administer German reparations payments after World War I, but it soon took on a life of its own, transforming itself into a pillar of the emerging global financial system.

former hotel next to a chocolate shop in Basel, Switzerland, BIS was so secretive that nobody was permitted to peer inside its boardroom, even when it was empty.

The secretive BIS became a crucial financial partner for the Nazis. Emil Puhl—vice president of Hitler’s Reichsbank and a close associate of McKittrick—once called BIS the Reichsbank’s only “foreign branch.” BIS laundered hundreds of millions of dollars in Nazi gold looted from the treasuries of occupied countries.

Dulles and McKittrick continued to work closely together for the rest of the war. In the final months of the conflict, the two men collaborated against a Roosevelt operation called Project Safehaven that sought to track down and confiscate Nazi assets that were stashed in neutral countries. Administration officials feared that, by hiding their ill-gotten wealth, members of the German elite planned to bide their time after the war and would then try to regain power. Morgenthau’s Treasury Department team, which spearheaded Project Safehaven, reached out to the OSS and BIS for assistance. But Dulles and McKittrick were more inclined to protect their clients’ interests.

Dulles believed that a good number of these powerful German figures should be returned to postwar power, to ensure that Germany would be a strong bulwark against the Soviet Union. And during the Cold War, he would be more intent on using Nazi loot to finance covert anti-Soviet operations than on returning it to the families of Hitler’s victims.

While Allen Dulles was using his OSS post in Switzerland to protect the interests of Sullivan and Cromwell’s German clients, his brother Foster was doing the same in New York. By playing an intricate corporate shell game, Foster was able to hide the U.S. assets of major German cartels like IG Farben and Merck KGaA, the chemical and pharmaceutical giant, and protect these subsidiaries from being confiscated by the federal government as alien property. Some of Foster’s legal origami allowed the Nazi regime to create bottlenecks in the production of essential war materials—such as diesel-fuel injection motors that the U.S. military needed for trucks, submarines, and airplanes. By the end of the war, many of Foster’s clients were under investigation by the Justice Department’s antitrust division. And Foster himself was under scrutiny for collaboration with the enemy.

Allen was acutely aware that knowledge was power, and he would use his control of the country’s rapidly expanding postwar intelligence apparatus to carefully manage the flow of information about him and his brother.

During the 1930s, after he fell into the less refined company of the SS thugs who had taken over Germany, Hohenlohe popped up as an occasional guest of Allen and Clover in New York. Hohenlohe was just one more member of the titled set who saw advantages to Hitler’s rise, and was quite willing to overlook its unpleasant side, which the prince explained away as rank-and-file Nazi Party excesses that would inevitably be sorted out.

A Jew by birth, Stephanie found social position by marrying another Hohenlohe prince. In the years before the war, she became one of Hitler’s most tireless promoters, helping to bring British press magnate Lord Rothermere into the Nazi fold. Stephanie took Hitler’s handsome, square-jawed adjutant Fritz Wiedemann as a lover and laid big plans for their rise to the top of the Nazi hierarchy. But it was not to be. Jealous of her favored position with Hitler, SS rivals plotted against her, spreading stories about her Jewish origins. Her aunt died in a concentration camp, and Stephanie was forced to flee Germany.

(There is no getting around this unwelcome fact: Hitler was much more fashionable in the social settings that men like Dulles frequented—in England as well as the United States—than it was later comfortable to admit.)

Dulles and Tyler met with Hohenlohe on several other occasions over the next few weeks, from February into April. And even as late as November 1943, Dulles continued to forward to Washington Prince Max’s reports on Himmler’s frame of mind. Dulles regarded the prince as a serious enough collaborator to give him a secret OSS code number, 515.

Among Dulles’s confidential sources was a German industrialist who was the first prominent figure inside the Nazi domain to provide credible information about the early stages of the Final Solution. The stories that the industrialist brought across the Swiss border were almost too monstrous to believe. The information that began flowing into neutral Switzerland, the listening post for war-torn Europe, should have helped force drastic Allied action. But it did not.

It is not widely recognized that the Nazi reign of terror was, in a fundamental way, a lucrative racket—an extensive criminal enterprise set up to loot the wealth of Jewish victims and exploit their labor. The chemical giant Farben was at the forefront of integrating concentration camp labor into its industrial production process, with other major German corporations like Volkswagen, Siemens, and Krupp following closely behind. Himmler’s SS empire moved aggressively to cut itself in on the spoils, extracting sizable payments from these companies for providing them with a steady flow of forced labor.

In frustration with the information bottleneck, Rabbi Wise finally held a press conference two days before Thanksgiving, announcing that Hitler had already killed about two million European Jews and had plans to exterminate the rest. The New York Times buried the story on page 10, The Washington Post on page 6. The press was reluctant to highlight such an explosive story since it lacked official government sources.

When Dulles’s communications from Bern to Washington were declassified decades later by the government, scholars were able to decipher his wartime obsessions. Dulles’s interest was absorbed by psychological warfare tricks, such as distributing counterfeit stamps behind enemy lines depicting Hitler’s profile as a death’s skull, and other cloak-and-dagger antics. He was also deeply engaged with mapping out grand postwar strategies for Europe. But few of his more than three hundred communiqués mentioned the killing of Jews—and none carried

Nuremberg trials, which stretched from 1946 to 1949. In all, some two hundred accused German war criminals were prosecuted at Nuremberg, and hundreds more would be tried in military and civilian courts over the following decades. But due to Dulles’s carefully calibrated interventions, a number of Europe’s most notorious war criminals—men who should have found themselves in the dock at Nuremberg, where they almost certainly would have been convicted of capital crimes—escaped justice. Some were helped to flee through “ratlines” to Franco’s Spain, the Middle East, South America, and even the United States. Others were eased into new lives of power and affluence in postwar West Germany, where they became essential confederates in Dulles’s rapidly growing intelligence complex.

Like many convicted Nazi criminals in the early Cold War years, a number of the Nuremberg defendants sentenced to prison were later the beneficiaries of politically motivated interventions and early releases; few of the some five thousand convicted Nazis were still in prison after 1953. A number of the interventions on behalf of fortunate war criminals could be traced to the quiet stratagems of Allen Dulles.

It was, according to the story that Dulles assiduously spun throughout the rest of his life, a feat of daring personal diplomacy. Time magazine—which, under the ownership of his close friend Henry Luce, could always be counted on to give Dulles good press—trumpeted Operation Sunrise as “one of the most stunning triumphs in the history of secret wartime diplomacy.” The reality, however, was far from triumphant.

Under the terms of Operation Sunrise, Wolff specifically agreed not to blow up the region’s many hydroelectric plants, which generated power from the water roaring down from the Alps. Most of these installations were owned by a multinational holding company called Italian Superpower Corporation. Incorporated in Delaware in 1928, Italian Superpower’s board was evenly divided between American and Italian utility executives, and by the following year the power company was swallowed by a bigger, J. P. Morgan–financed cartel. The ties between Italian Superpower and Dulles’s financial circle were reinforced when, toward the end of the war, the spymaster’s good friend—New York banker James Russell Forgan—took over as his OSS boss in London. Forgan was one of Italian Superpower’s directors.

subsequent round of medical experiments at Dachau was aimed at finding the best ways to revive German aviators who were rescued after crashing into the frigid North Sea. Camp inmates were forced to stand naked in freezing weather for up to fourteen hours. Others were submerged in tanks of iced water for three hours at a time. The subjects of the initial freezing experiments all died. But then the doctors added a new twist to their experiments. They “rewarmed” their victim in a hot bath and then revived him further with “animal heat” provided by four female Gypsies. The victim, after being nearly frozen to death, suddenly found his naked body warmly embraced by four women who brought him back to life.

In the mid-1950s, the increasingly self-assured Wolff, convinced that Germany needed his leadership, became politically active again. In 1953, he took a lead role in establishing the Reichsreferat, a neofascist party, and in 1956, he began organizing an association of former SS officers. The old ideas came slithering out once more: the demonization of non-Germanic races and the Bolshevist menace, the glorification of power.

After his release from prison, Wolff had developed a side business with U.S. intelligence agencies, selling information to a notorious espionage freebooter named John “Frenchy” Grombach, who had served in Army intelligence. Grombach gathered information from a far-flung network of SS old boys and other ex-Nazis in Europe, peddling it to the CIA, State Department, and corporate clients. But Wolff knew that his best connection in the American intelligence world was Allen Dulles himself, who by 1953 had become chief of the CIA.

Angleton, who was wired into the Vatican, helped arrange a secret meeting for Dulles with Pope Pius XII, who had maintained a mutually beneficial arrangement with Mussolini’s regime and was a determined foe of Communism.

The espionage scene in postwar Rome was rife with rivalries and competing agendas. Some U.S. intelligence units, such as Leo Pagnotta’s, were determined Nazi hunters. But other operatives, such as Angleton, had very different objectives. This spy-versus-spy atmosphere made Pagnotta’s investigative work extremely complicated.

In the beginning, Dollmann was a cooperative prisoner, readily revealing the address of his apartment on Via Archimede. When Pagnotta’s team raided the apartment, they narrowly missed catching Dollmann’s infamous roommate Walter Rauff, who managed to flee to Bari, on the Adriatic coast, where he boarded a ship for Alexandria, Egypt—the next stop in the Nazi exterminator’s long and winding ratline. Rauff would cap his bloody career in Chile, where he became a top adviser to DINA, military dictator Augusto Pinochet’s own Gestapo. When Rauff died in 1984—at age seventy-seven, after successfully rebuffing years of extradition attempts—hundreds of aging Nazis flocked to his funeral in Santiago, where he was laid to rest amid loud salutes of “Heil Hitler!”

Frankfurt was still pulverized from the war. One of the few buildings left miraculously untouched by Allied bombing was the massive IG Farben complex, which now served as the headquarters of the Supreme Allied Command.

Dollmann’s moneymaking schemes grew more frantic. In December 1952, he quietly reached out to Charles Siragusa, a federal narcotics agent in the U.S. embassy in Rome with close ties to the CIA. Siragusa had proved very useful to Angleton over the years, as a bagman for political payoffs and as a link to the criminal underworld when the agency required the Mafia’s services. Dollmann had his own interesting offer for Siragusa. He proposed becoming a paid informant for the narcotics agent and infiltrating the neo-Nazi movement in Vienna, which he claimed was financing its activities by dealing cocaine. Dollmann’s offer smacked of desperation, but, in fact, he was already spying on other ex-Nazi colleagues for the CIA. At the same time, in true Dollmann fashion, he was also hiring himself out to these neo-Nazi groups and reporting back to them about U.S. intelligence activities. As if this web of competing loyalties was not complicated enough, while Dollmann was living in Madrid by the grace of the Franco government, he was also working as a British spy.

“hymns of hate,”

She fantasized about going on killing sprees with an ax or sledgehammer, and when those weapons proved too limited, she mused about poison gas. She unspooled long lists of potential victims, but she devoted one entire murder fantasy in March 1947 to her husband. “I hate my husband,” it began. “I hate my husband, I hate my husband. Oh, how I hate my husband . . . I want to kill him . . . I will be like a fighting cock with knives on my talons, I will cut him in ribbons with sharp knives, I will cut him in the back, I will even perhaps cut his throat with a sharp sharp knife tied to my talons when I am a bloody murderous fighting cock.”

Dulles was so enamored with the flow of provocative psycho-political perceptions from Jung that he gave the psychologist an OSS number—Agent 488. After the war, the spymaster hinted broadly to a Jung family friend that the sage of Zurich had even contributed to the Allied cause by leaking information he had gleaned from sessions with patients who were connected to the enemy side. But this might have been an exaggeration from a spy chief who liked to pride himself on all the influential personalities he had in his pocket.